Calculating Downpayment on FHA

For many years we calculated FHA down payment by way of Acquisition Cost. Now… that’s “out the window.” With the new “revisions” we calculated a “straight” 3.5% as reflected in the Mortgagee Letter below:

Closing costs: Closing costs may not be used to help meet the minimum 3.5% downpayment requirement. Closing costs are not considered in the mortgage amount/downpayment calculation for purchase money mortgages.

FHA Down Payment Requirements: If you are purchasing a “regular” house (not a distressed home), FHA requires a 3.5% downpayment. The down payment can be a gift, it can be from the sale of an asset (we had one borrower sell a bass boat so he could buy a house), savings and… if you qualify for NC Housing Finance Agency money- up to 3% of this can be given to you by the Government (with a few strings attached of course).

Maximum Loan Amounts: Maximum FHA Loan Limits Vary per County, and are subject to change each October. Congress has said that they will be lowering the High Cost Area FHA loans that are currently available in areas like Washington, DC and San Francisco in October of 2012. It looks like the maximum FHA Loan Limit for Homes in Raleigh will change at that time too. The FHA Maximum Loan limit for Wake County is $295,000 – (and although Congress did lower the the 2012 limit down to $271,050 for a few months… they moved it back to $295,000 shortly thereafter).

This is a huge difference – and if you are working with a loan officer who is not familiar with FHA – you could end up at the closing table needing more money. Be careful!

Other people who are interested in FHA financing sometimes co-sign with a child. Co-signing is one of the most popular ways we see benefit for grandchildren and children these days. For more information on co-signing for an FHA mortgage loan, click here.

If you are considering FHA financing for a home in NC – please call Steve and Eleanor Thorne,Mortgage Banker in Cary , 919-649-5058. We offer the best rates and have decades of experience!

About Eleanor Thorne

I see myself differently than most loan officers in the Cary/Raleigh market. As a rare Cary native, I see myself as an expert on the area, on mortgage industry changes & factors that effect rates! I’ve lived in Cary since 1968 – and I’m second generation “mortgage.” I work with my husband, Steve Thorne Mortgage Loan Originator #60596 Equal Housing Lender